Newport is looking to expand a ban citywide on new, non-owner occupied short-term rentals under 30 days.
The city previously banned new, non-owner-occupied short-term rentals in residential zones in 2022. On July 10, the City Council unanimously approved a resolution instructing city administration to present ordinance changes and administrative policies to prohibit such uses in any zone in the city by July 24. If approved, any potential ban would exempt properties “currently under contract to be purchased or permitted” for short- term rental use, according to the resolution.
According to city solicitor Christopher Behan, the final ordinance changes to enact the ban as proposed will require approval from the Planning Board. A first reading of the new policy is tentatively slated for a first reading and vote on July 24 and will require a second reading and vote in August before becoming law.
According to councilor Mark Aramli, who authored the resolution, a law passed by the Rhode Island General Assembly in its previous session allows the conversion of commercial and industrial property to a residential use by right.
“That sounds great for creating new housing,” Aramli said. “The problem is that then allows you to convert that commercial or industrial building to a [short-term rental]. You can imagine the ma- and-pop stores on Broadway, all of the small offices, all of the retail outlets, any of those can now be converted to residential property, which can then be converted, if in a commercial zone, to a [short- term rental].”
But the problem goes beyond that, according to Aramli. His resolution notes the city’s “housing crisis” and the “creation of an environment where middle class and workforce housing is unattainable,” which drives away many long-term residents, he said.
“The long-term residents who have been renters for 10, 20 or 30 years . . . are being pushed out of the city,” he said. “The short-term rentals are a clear driver. It is incredibly lucrative to run a short- term rental versus simply taking in a year-round renter.”
The resolution comes on the heels of a workshop held last month in which the council and Planning Board considered ideas to increase housing stock for long- term residency, including adding 266 dwelling units on top of and surrounding the Gateway Visitors Center parking garage. That workshop followed a survey conducted by Libra Planners, a consulting firm formed by former city planning officials, that found that rents are too high and most respondents could no longer afford to live in Newport.
The potential ban is the latest tactic deployed in a battle for the city’s housing stock. In addition to its 2022 ban, the city increased its annual short-term rental registration fee from $100 to $500 for owner-occupied properties and to $1,000 for non-owner-occupied properties. That year, it also created new short-term rental enforcement positions, which comb hosting platforms to ensure advertised properties are registered and in compliance, and bifurcated its residential tax structure to give year-round residents a partial exemption, while passing on the resulting tax burden to those who live in Newport less than half of the year.
In January, the council approved sweeping changes, also enacted by the state legislature, to its zoning code that are intended to increase housing development. It is currently in the process of further amending its zoning code with localized changes that include the creation of new zones to increase density and streamline the development process. About 280 to 300 units are in various stages of permitting and development, according to the Planning Department, part of a new city goal to add a net 50 units of housing stock per year. The city is also now considering allowing multi-family dwellings in all residential zones and targeted development in the North End and other areas.
But the city’s efforts have extended beyond dramatic, headline inducing actions. In April, it purchased a $200,000 software program intended to increase short-term rental compliance up to 30 percent and recently began enforcing parking restrictions around short-term rentals, something that was not done previously, according to Planning and Economic Development director, Patricia Reynolds.
“We had been trying to stop and slow the bleeding,” said Mayor Xay Khamsyvoravong, who co-sponsored resolutions with Aramli last year to modernize the city’s zoning code and overhaul its Historic District Commission. “[The state law change] has opened up an entire new wound for us, where we could potentially hemorrhage more housing.”
Currently, about 2,500 dwelling units of the city’s total 13,000 units are utilized for seasonal, vacation and short-term rentals. Libra Planners’ study found that the city’s rent and housing prices are double the state median. Most survey respondents said short-term rentals require more regulation. Moreover, as the city witnessed the conversion of multi-family to single family dwellings for seasonal and vacation rentals, there were only eight permits granted for residential development in 2022, the last year the data was available, according to HousingWorks RI.
Councilor Jeanne-Marie Napolitano, who was first elected in 1991 and previously served as mayor, said she is working on her own resolution with city administration to further regulate short-term rentals, but Aramli submitted his for consideration before hers was ready. She said the increasing trend of buying property as an investment blindsided the city.
“All of a sudden, there were totally dark neighborhoods,” she said. “It makes it impossible for people to live here full time. It adversely impacts our school system.
“I think it’s time for us to take the city back,” she added. “I think it’s the right move for the city. I’m just sorry we didn’t do it a year ago.”
“I wish we did this a very long time ago,” Aramli, first elected in 2022, said.
